By Jonathan Buck

On the day that the European Central Bank unveiled quantitative easing, German Chancellor Angela Merkel had a message for her euro-zone neighbors – get your houses in order.

European leaders shouldn’t shy away from meaningful structural reforms regardless of what the ECB has done, Merkel said in a special session at the annual meeting of the World Economic Forum in Davos, Switzerland.

“We need to promote growth and create long-term jobs,” Merkel said.

The remarks might be directed toward France and Italy, in particular. France has failed to make substantial reforms, while Italy’s initial enthusiasm to enact changes has faltered.

It is notable that she chose traditionally neutral Switzerland to make her remarks, although President Francois Hollande of France and Italian Prime Minister Matteo Renzi both are in Davos this week. Their noses may be a little out of joint.

“The European single market needs to become less regulated and more open,” Merkel said.

The growth-austerity argument is a false dichotomy, she added. “Germany has shown that growth-oriented fiscal policy is possible,” she said.

Her message was echoed by economists and business leaders.

“Forceful QE and forceful structural reforms, including currency adjustment, are what is needed,” said Ray Dalio, chairman and chief investment officer of Bridgewater Associates.

He pointed to Spain as an example of what can be achieved.

“Spain has done a wonderful job with structural reforms. It is a model,” he said, noting that the fastest growth often comes from countries that successfully implement structural reforms.

About Davos Report

The World Economic Forum’s annual meeting in Davos, Switzerland, attracts 1,500 corporate leaders. On the sidelines of the meeting, we talk to executives to learn about business trends and strategic developments.

The blog is written by Barron’s Europe Editor Jonathan Buck, who previously worked for The Wall Street Journal and its international editions. He has attended the World Economic Forum’s annual meeting each year since 2011.